Preserving Employee Morale During Downsizing Harvard Case Solution & Analysis

Preserving Employee Morale During Downsizing Case Solution

As companies continue to downsize, they have to consider the best way to maintain their workers' morale to realize increases such as higher productivity and more flexibility. Those who survive layoffs and the supervisors who must implement those layoffs frequently show decreased commitment. Their trust in the company may be destroyed and they may feel powerless in the aftermath of the activities of top management. The authors propose a four-stage method of downsizing, gleaned from surveys and interviews, which may keep workers' trust and sense of empowerment.

First, consider downsizing only as a last resort. Also downsizing should be part of a clearly defined, long term vision that matches into the overall strategic plan of the business. Second, consider all stakeholders' demands--survivors, laid off workers, the community, national and local press, and any affected government agencies. The firm should form a cross-functional team to represent all stakeholders' interests. Third, at the announcement period, senior supervisors should clarify the necessity of the downsizing and it helps the firm in the long term. The fourth period, execution, is the most significant. Direction should communicate often and be fair and open. The firm should do its best to ensure that laid off workers are employed elsewhere and offer them ample benefits packages. It should seek remaining employees' thoughts about restructuring work procedures and supply any necessary training.

PUBLICATION DATE: December 01, 1998

This is just an excerpt. This case is about ORGANIZATIONAL DEVELOPMENT

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